PLR 200301048: Emergency ferry service ruling extended through 2005

Plain-English summary

An exempt organization had temporarily operated ferry service after a metropolitan area's public transportation system was severely damaged. The IRS had previously ruled that the emergency service, as described, was not an unrelated trade or business under section 513(a). Because the transportation system remained unrestored and local authorities again asked for help, the organization sought more time to operate the ferries. The IRS modified its earlier ruling to extend the service period through October 1, 2005, based on the represented facts. The organization's board said it would check the continuing need for the emergency service during that period.

Ruling snapshot

• Question: May the organization continue the emergency ferry service under its prior unrelated business ruling through October 1, 2005?
• Outcome: Approved as a modification of the earlier ruling.
• Key authorities: IRC § 513(a).

Full text (IRS public release)

200301048

DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
WASHINGTON, D.C. 20224

TAX EXEMPT AND
GOVERNMENT ENTITIES
DIVISION

Date: OCT 11 2002 Contact Person:
identification Number:

S.I.N. #513.00-00
Telephone Number:

T:EO:B1

Employer Identification Number:

V =
O =
N =
T =
M =

Dear Sir or Madam:

This is in reply to your recent ruling request in which you requested a modification of Letter Ruling 20020451.

Letter Ruling 20020451 (the Ruling) involved tragic events which caused the public transportation system of the V metropolitan area to be severely damaged. The transportation authorities in the area urged that commuters seek alternative public transportation routes. Ferries were recommended as one alternative form. In an effort to help alleviate this transportation emergency pending restoration of the area's damaged public transportation system, O conducted a ferry service in the N from October 15, 2001 through April 15, 2002. O had to abandon its efforts in April 2002 due to its prior commitments of helping further its exempt purposes by conducting whale watching tours in the T, even though the transportation system had not yet been restored. In Letter Ruling 20020451 we ruled that providing ferry service from October 15, 2001 to April 15, 2002, in the manner and for the purposes described in your ruling request would not constitute an unrelated trade or business within the meaning of section 513(a) of the Code.

You now request that Letter Ruling 20020451 be modified to permit O to conduct the ferry service in the N until October 1, 2005. You represent and have submitted materials substantiating that the public transportation system of the V area in existence before the tragic events has yet to be restored. You have been asked again by the M to assist in providing

200301048

alternative transportation in the form of ferry transportation. You represent that your Board of Directors will exercise due diligence to assure the continued need for this emergency ferry service during the ruling period.

Accordingly, based on all the facts and circumstances in your ruling request and the supplemental information you have provided, Letter Ruing 200204051 is hereby modified to extend the time for you to conduct the ferry service as described until October 1, 2005.

If you have any questions about this ruling, please contact the person whose name and telephone number are shown in the heading of this letter.

Sincerely,

(signed) Marvin Friedlander

Marvin Friedlander
Manager, Exempt Organizations
Technical Group 1